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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization dated as of November 12, 2009 (the
"Agreement") is between each selling entity identified in Schedule A hereto
(each a "Selling Corporation")(1), on behalf of each series thereof identified
in Schedule A hereto as a Selling Fund (each a "Selling Fund"), each
corresponding buying entity identified in Schedule A hereto (each a "Buying
Corporation")(2), on behalf of each series thereof identified in Schedule A
hereto as the corresponding Buying Fund (each a "Buying Fund"), and RiverSource
Investments, LLC (solely for the purposes of Sections 3c and 11 of the
Agreement).
This Agreement shall be treated for all purposes as if each reorganization
between a Selling Fund and its corresponding Buying Fund contemplated hereby had
been the subject of a separate agreement. As context requires a Buying
Corporation that is not organized as a series fund and that may not be
considered or meet the definition of "Buying Fund" as set forth above, may be
referred to as a "Buying Fund," for purposes of this Agreement.
In consideration of their mutual promises, the parties agree as follows:
1. SHAREHOLDER APPROVAL. Each Selling Fund will call a meeting of its
shareholders for the purpose of approving the Agreement and the
transactions it contemplates (each a "Reorganization"). Each Buying Fund
agrees to furnish data and information, as reasonably requested, for the
proxy statement to be furnished to shareholders of the corresponding
Selling Fund.
2. REORGANIZATION.
a. Plan of Reorganization. Each Reorganization will be a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"). At the Closing, each Selling
Corporation will convey all of the assets of each Selling Fund to the
corresponding Buying Fund. Each Buying Fund will assume all
liabilities of the corresponding Selling Fund. At the Closing, each
Buying Corporation will deliver shares of each Buying Fund, including
fractional shares, to the corresponding Selling Corporation on behalf
of the corresponding Selling Fund. The number of shares will be
determined by dividing the value of the net assets attributable to
each class of shares of each Selling Fund, computed as described in
paragraph 3(a), by the net asset value of one share of the
corresponding class of the corresponding Buying Fund, computed as
described in paragraph 3(b). Each Selling Fund will not pay a sales
charge on the receipt of the corresponding Buying Fund's shares in
exchange for the assets of such Selling Fund. In addition, the
shareholders of each Selling Fund will not pay a sales charge on
distribution to them of shares of the corresponding Buying Fund.
b. Closing and Effective Time of the Reorganization. The Reorganization
and all related acts necessary to complete the Reorganization (the
"Closing") will occur on the first day on which the New York Stock
Exchange (the "NYSE") is open for business following approval of
shareholders of each Selling Fund and receipt of all necessary
regulatory approvals, or such later date as the officers of the
Selling Corporation and Buying Corporation may agree.
3. VALUATION OF NET ASSETS.
a. The net asset value of each Selling Fund will be computed as of the
close of regular trading on the NYSE on the business day immediately
preceding the day of Closing (the "Valuation Date") using the
valuation procedures set forth in the corresponding Buying Fund's then
current prospectus.
b. The net asset value per share of shares of each Buying Fund will be
determined as of the close of regular trading on the NYSE on the
Valuation Date, using the valuation procedures set forth in each
Buying Fund's then current prospectus.
c. At the Closing, each Selling Fund will provide the corresponding
Buying Fund with a copy of the computation showing the valuation of
the net asset value per share of such Selling Fund on the Valuation
Date, and each Buying Fund will provide the corresponding Selling Fund
with a copy of the computation showing the determination of the net
asset value per share of such Buying Fund on the Valuation Date. Both
computations will be certified by an officer of RiverSource
Investments, LLC, the investment manager.
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(1) The Selling Corporation for the Reorganization of RiverSource Partners
Aggressive Growth Fund, RiverSource Partners Select Value Fund, RiverSource
Partners Small Cap Equity Fund, RiverSource Partners Small Cap Growth Fund
and RiverSource Tax-Exempt Money Market Fund is a Minnesota Corporation and
the Selling Corporation for the Reorganization of Xxxxxxxx Global Smaller
Companies Fund is a Maryland Corporation.
(2) The Buying Corporation for each Buying Fund, RiverSource Mid Cap Growth
Fund, RiverSource Mid Cap Value Fund and RiverSource Partners International
Small Cap Fund is a Minnesota Corporation, and the Buying Corporation for
each Buying Fund, RiverSource Government Money Market Fund, Inc., Xxxxxxxx
Frontier Fund, Inc. and Xxxxxxxx Smaller-Cap Value Fund is a Maryland
Corporation.
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4. LIQUIDATION AND DISSOLUTION OF THE SELLING FUND.
a. On the date of the Closing, each Selling Corporation will liquidate
each Selling Fund and distribute shares of each class of the
corresponding Buying Fund to the shareholders of record of such
Selling Fund's corresponding class. Each Buying Fund will establish
shareholder accounts in the names of each corresponding Selling Fund
shareholder, representing the respective pro rata number of full and
fractional shares of such class of the Buying Fund due to each such
shareholder. All issued and outstanding shares of each Selling Fund
will simultaneously be cancelled on the books of each Selling
Corporation. Each Buying Fund or its transfer agent will establish
shareholder accounts in accordance with instructions from the
corresponding Selling Corporation.
b. Immediately after the close of business on the Valuation Date, the
share transfer books of each Selling Corporation relating to each
Selling Fund will be closed and no further transfer of shares will be
made.
c. Promptly after the Closing, each Buying Fund or its transfer agent
will notify each shareholder of the corresponding Selling Fund of the
number of shares distributed to the shareholder and confirm the
registration in the shareholder's name.
d. As promptly as practicable after the Closing, and in no event later
than twelve months from the date of the Closing, each Selling Fund
will be dissolved.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYING CORPORATION.
With respect to each Reorganization, each Buying Corporation represents and
warrants to the corresponding Selling Fund as follows:
a. Organization, Existence, etc. Each Buying Corporation is a corporation
duly organized, validly existing and in good standing under the laws
of the state of Maryland or Minnesota and has the power to carry on
its business as it is now being conducted.
b. Registration as Investment Company. Each Buying Corporation, or in the
case of separate series funds, the Buying Corporation, of which the
Buying Fund is a series, is registered under the Investment Company
Act of 1940 (the "1940 Act") as an open-end, management investment
company.
c. Capitalization. Each Buying Corporation for the Buying Fund,
RiverSource Mid Cap Growth Fund, RiverSource Mid Cap Value Fund and
RiverSource Partners International Small Cap Fund has authorized
capital of 10,000,000,000 shares of common stock, par value $0.01 per
share that can be allocated among the separate series as designated by
the Corporation's Board of Directors. The Buying Corporation for
Xxxxxxxx Smaller-Cap Value Fund has authorized capital of
2,000,000,000 shares of common stock, par value of $0.001 per share,
of which 1,000,000,000 are authorized for Xxxxxxxx Smaller-Cap Value
Fund. The Buying Corporation RiverSource Government Money Market Fund,
Inc. has authorized capital of 1,400,000,000 shares of common stock,
par value of $0.01 per share. The Buying Corporation Xxxxxxxx Frontier
Fund, Inc. has authorized capital of 500,000,000 shares of common
stock, par value of $0.10 per share. All of the outstanding shares of
each Buying Corporation have been duly authorized and are validly
issued, fully paid and non-assessable. Since each Buying Fund is
engaged in the continuous offering and redemption of its shares, the
number of outstanding shares may vary daily.
d. Financial Statements. Each Buying Fund's audited financial statements
as of the end of the last fiscal year, and the subsequent unaudited
semi-annual financial statements, if any (the "Buying Fund Financial
Statements"), fairly present the financial position of the Buying Fund
and the results of its operations and changes in its net assets for
the periods shown.
e. Shares to be Issued Upon Reorganization. The shares to be issued in
connection with the Reorganization will be duly authorized and, at the
time of the Closing, will be validly issued, fully paid and
non-assessable.
f. Authority Relative to the Agreement. Each Buying Corporation has the
power to enter into and carry out the obligations described in this
Agreement. The Agreement and the transactions contemplated by it have
been duly authorized by the Board of Directors of each Buying
Corporation and no other proceedings by any of the Buying Corporation
or the Buying Funds are necessary.
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g. No Violation. The Buying Corporation is not in violation of its
Articles of Incorporation or By-Laws (the "Articles") or in default in
the performance of any material agreement to which it is a party. The
execution of this Agreement and the completion of the transactions
contemplated by it will not conflict with, or constitute a breach of,
any material contract or other instrument to which each Buying Fund is
subject. The transactions will not result in any violation of the
provisions of the Articles or any law, administrative regulation or
administrative or court decree applicable to the Buying Funds.
h. Liabilities. The Buying Funds have no known liabilities of a material
amount, contingent or otherwise, other than liabilities disclosed in
each Buying Fund's Financial Statements, liabilities incurred in the
ordinary course of business subsequent to the date of the latest
annual or semi-annual financial statements, or liabilities previously
disclosed to the corresponding Selling Fund.
i. Litigation. There is no litigation, administrative proceeding or
investigation before any court or governmental body currently pending
or, to the knowledge of the Buying Funds, threatened, that would
materially and adversely affect the Buying Funds, their financial
condition or the conduct of their business, or that would prevent or
hinder completion of the transactions contemplated by this Agreement.
The Buying Funds know of no facts that might form the basis for the
institution of any such litigation, proceeding or investigation and
the Buying Funds are not a party to or subject to the provisions of
any order, decree or judgment.
j. Contracts. Except for contracts and agreements previously disclosed to
the Selling Corporation, the Buying Funds are not a party to or
subject to any material contract, debt instrument, plan, lease,
franchise, license or permit.
k. Regulated Investment Company Qualification. Each Buying Fund has
qualified and met the requirements for treatment as a "regulated
investment company" within the meaning of Section 851 of the Code with
respect to each taxable year since commencement of its operations and
will continue to meet such requirements and to so qualify at all times
through the Closing.
l. Taxes. As of the Closing, each Buying Fund will (i) have filed all
federal and other tax returns and reports that have been required to
be filed, (ii) have paid or provided for payment of all federal and
other taxes shown to be due on such returns or on any assessments
received, (iii) have adequately provided for all tax liabilities on
its books, (iv) except as disclosed to the Selling Fund, not have had
any tax deficiency or liability asserted against it or question with
respect thereto raised, and (v) except as disclosed to the Selling
Fund, not be under audit by the Internal Revenue Service or by any
state or local tax authority for taxes in excess of those already
paid.
m. Registration Statement. Each Buying Fund will file a registration
statement on Form N-14 (the "Registration Statement") with the
Securities and Exchange Commission under the Securities Act of 1933
(the "1933 Act") relating to the shares to be issued in the
Reorganization. At the time the Registration Statement becomes
effective, at the time of the shareholders' meeting described in
paragraph 1 and at the Closing, the Registration Statement will not
contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading.
However, none of the representations and warranties in this subsection
apply to statements in, or omissions from, the Registration Statement
made in reliance on information furnished by the Selling Fund for use
in the Registration Statement.
n. Business Activities. Each Buying Fund will operate its business in the
ordinary course between the date hereof and the date of the Closing,
it being understood that such ordinary course of business will include
regular and customary periodic dividends and distributions and any
other distribution that may be advisable.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING CORPORATION.
With respect to each Reorganization, the Selling Corporation represents and
warrants to each Buying Fund as follows:
a. Organization, Existence, etc. Each Selling Corporation is a
corporation duly organized, validly existing and in good standing
under the laws of the state of Minnesota or Maryland and has the power
to carry on its business as it is now being conducted.
b. Registration as Investment Company. Each Selling Corporation, or in
the case of a separate series funds, the Selling Corporation, of which
the Selling Fund is a series, is registered under the 1940 Act as an
open-end, management investment company.
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c. Capitalization. Each Selling Corporation for the Selling Fund,
RiverSource Partners Aggressive Growth Fund, RiverSource Partners
Select Value Fund, RiverSource Partners Small Cap Equity Fund,
RiverSource Partners Small Cap Growth Fund and RiverSource Tax-Exempt
Money Market Fund, has authorized capital of 10,000,000,000 shares of
common stock, par value $0.01 per share that can be allocated among
the separate series as designated by the Corporation's Board of
Directors. The Selling Corporation for the Selling Fund, Xxxxxxxx
Global Smaller Companies Fund has authorized capital of 2,000,000,000
shares of common stock, par value $0.001 per share, of which
400,000,000 are authorized for Xxxxxxxx Global Smaller Companies Fund.
All of the outstanding shares have been duly authorized and are
validly issued, fully paid and nonassessable. Since each Selling Fund
is engaged in the continuous offering and redemption of its shares,
the number of outstanding shares may vary daily.
d. Financial Statements. Each Selling Fund's audited financial statements
as of the end of the last fiscal year, and the subsequent unaudited
semi-annual financial statements, if any (the "Selling Fund Financial
Statements"), fairly present the financial position of the Selling
Fund, and the results of its operations and changes in its net assets
for the periods shown.
e. Authority Relative to the Agreement. Each Selling Corporation has the
power to enter into and to carry out its obligations under this
Agreement. The Agreement and the transactions contemplated by it have
been duly authorized by the Board of Directors of each Selling
Corporation and no other proceedings by the Selling Corporations or
the Selling Funds are necessary, other than the approval of
shareholders contemplated in paragraph 1.
f. No Violation. Each Selling Corporation is not in violation of its
Articles or in default in the performance of any material agreement to
which it is a party or in default in the performance of any material
agreement to which it is a party). The execution of this Agreement and
the completion of the transactions contemplated by it will not
conflict with or constitute a breach of, any material contract to
which the Selling Funds are subject. The transactions will not result
in any violation of the provisions of the Articles, as the case may
be, or any law, administrative regulation or administrative or court
decree applicable to the Selling Funds.
g. Liabilities. The Selling Funds have no known liabilities of a material
amount, contingent or otherwise, other than liabilities disclosed in
the Selling Fund Financial Statements, liabilities incurred in the
ordinary course of business subsequent to the date of the latest
annual or semi-annual financial statements, or liabilities previously
disclosed to each Buying Fund.
h. Litigation. There is no litigation, administrative proceeding or
investigation before any court or governmental body currently pending
or, to the knowledge of the Selling Funds, threatened, that would
materially and adversely affect the Selling Funds, their financial
condition or the conduct of their business, or that would prevent or
hinder completion of the transactions contemplated by this Agreement.
Each Selling Fund knows of no facts that might form the basis for the
institution of any such litigation, proceeding or investigation and is
not a party to or subject to the provisions of any order, decree or
judgment.
i. Contracts. Except for contracts and agreements previously disclosed to
the Buying Corporations, each Selling Fund is not a party to or
subject to any material contract, debt instrument, plan, lease,
franchise, license or permit.
j. Regulated Investment Company Qualification. Each Selling Fund has
qualified and met the requirements for treatment as a "regulated
investment company" within the meaning of Section 851 of the Code with
respect to each taxable year since commencement of its operations and
will continue to meet such requirements and to so qualify at all times
through the Closing.
k. Taxes. As of the Closing, each Selling Fund will (i) have filed all
federal and other tax returns and reports that have been required to
be filed, (ii) have paid or provided for payment of all federal and
other taxes shown to be due on such returns or on any assessments
received, (iii) have adequately provided for all tax liabilities on
its books, (iv) except as disclosed to the corresponding Buying Fund,
not have had any tax deficiency or liability asserted against it or
question with respect thereto raised, and (v) except as disclosed to
the corresponding Buying Fund, not be under audit by the Internal
Revenue Service or by any state or local tax authority for taxes in
excess of those already paid.
l. Fund Securities. All securities listed in the schedule of investments
of each Selling Fund as of the Closing will be owned by each Selling
Fund free and clear of any encumbrances, except as indicated in the
schedule.
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m. Registration Statement. The Selling Funds will cooperate with the
Buying Funds and will furnish information relating to the Selling
Corporations and the Selling Funds required in the Registration
Statement. At the time the Registration Statement becomes effective,
at the time of the shareholders' meeting described in paragraph 1 and
at the Closing, the Registration Statement, as it relates to the
Selling Corporations or the Selling Funds, will not contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading. However, the
representations and warranties in this subsection apply only to
statements in or omissions from the Registration Statement made in
reliance upon information furnished by the Selling Corporations or the
Selling Funds for use in the Registration Statement.
n. Provision of Books and Records. Each Selling Fund will provide its
books and records to the corresponding Buying Fund for purposes of
preparing any tax returns required by law to be filed after the
Closing date, including (1) the tax return for the period ending on
the Closing date, and (2) the tax return for the period beginning the
day after the Closing and ending the earlier of the current fiscal
year-end of the corresponding Buying Fund and the taxable year end
chosen by the corresponding Buying Fund following the Reorganization.
o. Business Activities. Each Selling Fund will operate its business in
the ordinary course between the date hereof and the date of the
Closing, it being understood that such ordinary course of business
will include regular and customary periodic dividends and
distributions and any other distribution that may be advisable.
7. CONDITIONS TO OBLIGATIONS OF THE BUYING CORPORATION. The obligations of
each Buying Corporation with respect to each Reorganization are subject to
the satisfaction of the following conditions:
a. Shareholder Approval. For RiverSource Partners Aggressive Growth Fund,
RiverSource Partners Select Value Fund, RiverSource Partners Small Cap
Equity Fund, RiverSource Partners Small Cap Growth Fund and
RiverSource Tax- Exempt Money Market Fund this Agreement will have
been approved by the affirmative vote of the holders of the majority
of the voting power of all Selling Fund shares entitled to vote and
for Xxxxxxxx Global Smaller Companies Fund this Agreement will have
been approved by the affirmative vote of a majority of the outstanding
voting securities of the Selling Fund. A vote of a majority of the
outstanding voting securities of the Selling Fund is defined in 1940
Act as a vote of the lesser of (a) 67% or more of the shares of the
Selling Fund that are present or represented by proxy at the Meeting,
if more than 50% of the outstanding shares are present in person or by
proxy at the Meeting; or (b) more than 50% of the outstanding shares
of the Selling Fund.
b. Representations, Warranties and Agreements. Each Selling Corporation
and the Selling Funds will have complied with this Agreement and each
of the representations and warranties in this Agreement will be true
in all material respects as of the date of the Closing. An officer of
each Selling Corporation will provide a certificate to each Buying
Fund confirming that, as of the Closing, the representations and
warranties set forth in Section 6 are true and correct and that there
have been no material adverse changes in the financial condition,
results of operations, business, properties or assets of the
corresponding Selling Fund since the date of its last financial
statement, except as otherwise indicated in any financial statements,
certified by an officer of the Selling Corporation, and delivered to
such Buying Fund on the date of the Closing.
c. Regulatory Approvals.
- The Registration Statement referred to in Sections 5(m) and 6(m)
will be effective and no stop orders under the 1933 Act will have
been issued.
- All necessary approvals, consents and exemptions from federal and
state regulatory authorities will have been obtained.
d. Opinion of Counsel. Each Buying Corporation will have received an
opinion of counsel for the Selling Corporation, dated as of the date
of the Closing, to the effect that: (i) the Selling Corporations for
RiverSource Partners Aggressive Growth Fund, RiverSource Partners
Select Value Fund, RiverSource Partners Small Cap Equity Fund,
RiverSource Partners Small Cap Growth Fund and RiverSource Tax-Exempt
Money Market Fund are corporations duly organized and validly existing
under the laws of the state of Minnesota; the Selling Corporation for
Xxxxxxxx Global Smaller Companies Fund is a corporation duly organized
and validly existing under the laws of the state of Maryland; (ii)
each Selling Fund is a series of the Selling Corporation, an open-end
management investment company registered under the 1940 Act, as
applicable; (iii) this Agreement and the Reorganization has been duly
authorized and approved by all requisite action of the Selling
Corporations and each Selling Fund and this Agreement has been duly
executed by, and is a valid and binding obligation of, each Selling
Corporation.
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e. Declaration of Dividend. Each Selling Fund will have declared, prior
to the Closing, a dividend or dividends, which, together with all
previous such dividends, shall have the effect of distributing to the
Selling Funds' shareholders (i) all of the excess of (x) the Selling
Funds' investment income excludable from gross income under Section
103 of the Code over (y) the Selling Funds' deductions disallowed
under Sections 265 and 171 of the Code, (ii) all of the Selling Funds'
investment company taxable income as defined in Section 852 of the
Code (in each case computed without regard to any deduction for
dividends paid) and (iii) all of the Selling Funds' net capital gain
realized (after reduction for any capital loss carryover), in each
case for the current taxable year (which will end on the Closing date)
and any preceding taxable years for which such a dividend is eligible
to be made under Section 855 of the Code.
8. CONDITIONS TO OBLIGATIONS OF THE SELLING CORPORATION. The obligations of
the Selling Corporation with respect to each
Reorganization are subject to the satisfaction of the following conditions:
a. Shareholder Approval. For RiverSource Partners Aggressive Growth Fund,
RiverSource Partners Select Value Fund, RiverSource Partners Small Cap
Equity Fund, RiverSource Partners Small Cap Growth Fund and
RiverSource Tax- Exempt Money Market Fund this Agreement will have
been approved by the affirmative vote of the holders of the majority
of the voting power of all Selling Fund shares entitled to vote and
for Xxxxxxxx Global Smaller Companies Fund this Agreement will have
been approved by the affirmative vote of a majority of the outstanding
voting securities of the Selling Fund. A vote of a majority of the
outstanding voting securities of the Selling Fund is defined in 1940
Act as a vote of the lesser of (a) 67% or more of the shares of the
Selling Fund that are present or represented by proxy at the Meeting,
if more than 50% of the outstanding shares are present in person or by
proxy at the Meeting; or (b) more than 50% of the outstanding shares
of the Selling Fund.
b. Representations, Warranties and Agreements. Each Buying Fund will have
complied with this Agreement and each of the representations and
warranties in this Agreement will be true in all material respects as
of the date of the Closing. An officer of each Buying Corporation will
provide a certificate to each Selling Fund confirming that, as of the
Closing, the representations and warranties set forth in Section 5 are
true and correct and that there have been no material adverse changes
in the financial condition, results of operations, business,
properties or assets of the corresponding Buying Fund since the date
of its last financial statement, except as otherwise indicated in any
financial statements, certified by an officer of each Buying
Corporation, and delivered to such Selling Fund on or prior to the
last business day before the Closing.
c. Regulatory Approvals.
- The Registration Statement referred to in Sections 5(m) and 6(m)
will be effective and no stop orders under the 1933 Act will have
been issued.
- All necessary approvals, consents and exemptions from federal and
state regulatory authorities will have been obtained.
d. Opinion of Counsel. Each Selling Corporation will have received the
opinion of counsel for the Buying Corporation, dated as of the date of
the Closing, to the effect that: (i) the Buying Corporations for
RiverSource Mid Cap Growth Fund, RiverSource Mid Cap Value Fund and
RiverSource Partners International Small Cap Fund are corporations
duly organized and validly existing under the laws of the state of
Minnesota; the Buying Corporations for RiverSource Government Money
Market Fund, Inc., Xxxxxxxx Frontier Fund, Inc. and Xxxxxxxx
Smaller-Cap Value Fund, are corporations duly organized and validly
existing under the laws of the state of Maryland; (ii) each Buying
Corporation, or in the case of separate series funds, the Buying
Corporation of which the Buying Fund is a series of an open-end
management investment company registered under the 1940 Act; (iii)
this Agreement and the Reorganization has been authorized and approved
by all requisite action of each Buying Corporation and each Buying
Fund and this Agreement has been duly executed by, and is a valid and
binding obligation of, each Buying Corporation; and (iv) the shares to
be issued in the Reorganization are duly authorized and upon issuance
in accordance with this Agreement will be validly issued, fully paid
and non-assessable shares of each Buying Fund.
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9. CONDITIONS TO OBLIGATIONS OF THE SELLING CORPORATION AND THE BUYING
CORPORATION. The obligations of each of the Selling Corporation and the
Buying Corporation with respect to each Reorganization are subject to the
satisfaction of the following conditions:
Tax Opinions. With respect to each Reorganization between a Selling Fund
and its corresponding Buying Fund, the Selling Fund shall have received an
opinion of Ropes & Xxxx LLP satisfactory to such Selling Fund, and the
Buying Fund shall have received an opinion of Ropes & Xxxx LLP satisfactory
to such Buying Fund, substantially to the effect that, on the basis of
existing provisions of the Code, Treasury regulations promulgated
thereunder, current administrative rules, pronouncements and court
decisions, although, with respect to the Reorganizations of RiverSource
Partners Aggressive Growth Fund into RiverSource Mid Cap Growth Fund,
RiverSource Partners Select Value Fund into RiverSource Mid Cap Value Fund,
RiverSource Partners Small Cap Equity Fund into Xxxxxxxx Smaller-Cap Value
Fund, RiverSource Partners Small Cap Growth Fund into Xxxxxxxx Frontier
Fund and Xxxxxxxx Global Smaller Companies Fund into RiverSource Partners
International Small Cap Fund, the matter is not free from doubt, generally
for federal income tax purposes:
a. The acquisition by the Buying Fund of the assets of the Selling Fund
in exchange for the Buying Fund's assumption of all liabilities of the
Selling Fund and delivery to the Selling Fund of Buying Fund shares
(the "Acquisition Shares"), followed by the distribution by the
Selling Fund of the Acquisition Shares to the shareholders of the
Selling Fund in exchange for their Selling Fund shares, all as
provided in paragraph 2(a) and 4(a) hereof, will constitute a
reorganization within the meaning of Section 368(a) of the Code, and
the Selling Fund and the Buying Fund will each be "a party to a
reorganization" within the meaning of Section 368(b) of the Code;
b. No gain or loss will be recognized by the Selling Fund upon (i) the
transfer of its assets to the Buying Fund in exchange for the
Acquisition Shares and the assumption by the Buying Fund of all
liabilities of the Selling Fund or (ii) the distribution of the
Acquisition Shares by each Selling Fund to its shareholders in
liquidation, as contemplated in paragraph 4(a) hereof;
c. No gain or loss will be recognized by the Buying Fund upon receipt of
the assets of the Selling Fund in exchange for the Acquisition Shares
and the assumption by the Buying Fund of all liabilities of the
Selling Fund as contemplated in paragraph 2(a) hereof;
d. The tax basis in the hands of the Buying Fund of the assets of the
Selling Fund transferred to the Buying Fund in the Reorganization will
be the same as the tax basis of such assets in the hands of the
Selling Fund immediately prior to the transfer;
e. The holding periods of the assets of the Selling Fund in the hands of
the Buying Fund will include the periods during which such assets were
held by the Selling Fund;
f. No gain or loss will be recognized by the Selling Fund's shareholders
upon the exchange of their shares of the Selling Fund for the
Acquisition Shares;
g. The aggregate tax basis of the Acquisition Shares a Selling Fund
shareholder receives in the Reorganization will be the same as the
aggregate tax basis of his or her Selling Fund shares exchanged
therefor;
h. Each Selling Fund shareholder's holding period for the Acquisition
Shares will include the period for which he or she held the Selling
Fund shares exchanged therefor, provided that the shareholder held
such Selling Fund's shares as capital assets on the date of the
exchange; and
i. The Buying Fund will succeed to and take into account the items of the
Selling Fund described in Section 381(c) of the Code, subject to the
conditions and limitations specified in Sections 381, 382, 383 and 384
of the Code and the regulations thereunder.
Ropes & Xxxx LLP will express no view with respect to the effect of the
Reorganization on any transferred asset as to which any unrealized gain or
loss is required to be recognized under federal income tax principles (i)
at the end of a taxable year or upon the termination thereof or (ii) upon
the transfer of such asset regardless of whether such a transfer would
otherwise be a non-taxable transaction.
Each opinion will be based on certain factual certifications made by
officers of each Selling Fund and each Buying Fund, and will also be based
on customary assumptions. The opinions are not guarantees that the tax
consequences of the Reorganizations will be as described above. With
respect to the Reorganizations listed above, the opinions will note and
distinguish certain published precedent. There is no assurance that the
Internal Revenue Service or a court would agree with the opinions.
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10. AMENDMENT; TERMINATION; NON-SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS.
a. This Agreement may be amended in writing if authorized by the
respective Boards of Directors. The Agreement may be so amended at any
time before or after the shareholder approval contemplated by
paragraph 1 is obtained.
b. At any time prior to the Closing, any of the parties may waive in
writing (i) any inaccuracies in the representations and warranties
made to it and (ii) compliance with any of the covenants or conditions
made for its benefit.
c. Each party hereto may terminate this Agreement at any time prior to
the Closing by notice to the other party if a material condition to
its performance or a material covenant of the other party is not
fulfilled on or before the date specified for its fulfillment or a
material breach of this Agreement is made by the other party and is
not cured.
d. This Agreement may be terminated by any party at any time prior to the
Closing, whether before or after approval by the shareholders of each
Selling Fund, without any liability on the part of any party or its
respective directors, officers, or shareholders, on written notice to
the other party, and shall be terminated without liability as of the
close of business on , or a later date agreed upon by the officers of
the Selling Corporations and the Buying Corporations, if the Closing
is not effected on or prior to that date.
e. The representations, warranties and covenants contained in this
Agreement, or in any document delivered in connection with this
Agreement, will survive the Reorganization.
11. EXPENSES. RiverSource Investments, LLC and its affiliates will pay all
solicitation expenses in order to achieve shareholder approval of each
Reorganization whether or not the Reorganization is completed and will bear
the other costs of effecting each Reorganization (other than any brokerage
or other transaction costs associated with the sale or purchase of
portfolio securities in connection with a Reorganization).
12. GENERAL.
a. Headings. The headings contained in this Agreement are for reference
purposes only and will not affect the meaning or interpretation of
this Agreement. Nothing in this Agreement is intended to confer upon
any other person any rights or remedies by reason of this Agreement.
b. Governing Law. This Agreement will be governed by the laws of the
state of Minnesota.
IN WITNESS WHEREOF, each of the parties, individually and not jointly, has
caused this Agreement to be signed.
RIVERSOURCE MANAGERS SERIES, INC., on behalf of
RiverSource Partners Aggressive Growth Fund
RiverSource Partners Select Value Fund
RiverSource Partners Small Cap Equity Fund
RIVERSOURCE STRATEGY SERIES, INC., on behalf of
RiverSource Partners Small Cap Growth Fund
RIVERSOURCE TAX-EXEMPT MONEY MARKET SERIES, INC., on behalf of
RiverSource Tax-Exempt Money Market Fund
XXXXXXXX GLOBAL FUND SERIES, INC., on behalf of
Xxxxxxxx Global Smaller Companies Fund
By:
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
9
RIVERSOURCE GOVERNMENT MONEY MARKET FUND, INC.
RIVERSOURCE EQUITY SERIES, INC., on behalf of
RiverSource Mid Cap Growth Fund
RIVERSOURCE INTERNATIONAL MANAGERS SERIES, INC., on behalf of
RiverSource Partners International Small Cap Fund
RIVERSOURCE INVESTMENT SERIES, INC., on behalf of
RiverSource Mid Cap Value Fund
XXXXXXXX FRONTIER FUND, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
The undersigned is a party to this Agreement for the purposes of Section 3c and
11 only.
RIVERSOURCE INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Investment Officer
10
SELLING ENTITY SELLING FUND BUYING ENTITY BUYING FUND
-------------- ---------------------------- ---------------------------- ----------------------------
RiverSource Managers Series, RiverSource Partners RiverSource Equity Series, RiverSource Mid Cap Growth
Inc. Aggressive Growth Fund Inc. Fund
RiverSource Managers Series, RiverSource Partners Select RiverSource Investment RiverSource Mid Cap Value
Inc. Value Fund Series, Inc. Fund
RiverSource Managers Series, RiverSource Partners Small Xxxxxxxx Value Fund, Series, Xxxxxxxx Smaller-Cap Value
Inc. Cap Equity Fund Inc. Fund
RiverSource Strategy Series, RiverSource Partners Small Xxxxxxxx Frontier Fund, Inc. Xxxxxxxx Frontier Fund, Inc.
Inc. Cap Growth Fund
RiverSource Tax-Exempt Money RiverSource Tax-Exempt Money RiverSource Government Money RiverSource Government Money
Market Series, Inc. Market Fund Market Fund, Inc. Market Fund, Inc.
Xxxxxxxx Global Fund Series, Xxxxxxxx Global Smaller RiverSource International RiverSource Partners
Inc. Companies Fund Managers Series, Inc. International Small Cap Fund
